ICAP sales growing but costs hold back earnings

 
City A.M. Reporter
ICAP, the world's biggest interdealer broker, said it expected higher first-half revenues, though increased interest costs were holding back earnings growth.

"Increased interest costs resulting from the previously diclosed refinancing of ICAP's debt facilities reduced earnings growth," ICAP said in a trading update on Thursday.

ICAP said revenues for the first six months to 30 September were due to have risen by some 9 percent compared to last year.

The company added it was comfortable with analysts' current forecasts for its full-year profits.

Profit forecasts currently range from £333m pounds to £357m for the full year ending March 2011 and compares with a 2010 profit of £333m.

"If the pattern of business we have seen during the first six months continues for the rest of financial year, then the current range of analysts' forecasts for ICAP's profit is reasonable," the company said in a statement.

Earlier this week, the London Stock Exchange (LSE.L) said trading volumes had declined over the second quarter, but ICAP said it had benefited from high trading volumes in many of its markets.

The company said its electronic broking and post-trade processing divisions had been boosted by high frequency trading markets, and added that its interest rate derivatives, commodities and emerging markets businesses had performed well.